Tax audit: 5 things to know

1.In India, a tax audit is applicable to businesses whose total sales, turnover or gross receipts, exceed Rs.1 crore in a financial year, and professionals whose gross receipts exceed Rs.50 lakh in a financial year.

2.It aims to ensure that the books of accounts are maintained correctly, and calculation of taxable income is accurate and in compliance with the income tax laws.

3.The audit must be conducted by a chartered accountant, who submits the report in the prescribed format, along with the income-tax return.


4.Failure to get the accounts audited can result in a penalty of 0.5% of the turnover or gross receipts, subject to a maximum of Rs.1.5 lakh.

5.The tax audit report must be filed by 30 September of the assessment year.

Content courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.